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Latest Reports Trade Balance
Based on statements of officials at Indonesia’s Trade Ministry, the USA started its investigation into the trade deficits the USA has with 16 countries, including Indonesia. Two months ago US President Donald Trump ordered this trade probe as part of his “America First” policy. Trump wants the USA to have the upper hand (meaning a trade surplus) in trade relations.
Indonesia's Statistics Agency (BPS) announced Indonesia's trade surplus stood at USD $474 million in May 2017, significantly below analysts' estimates and the revised April 2017 trade surplus of USD $1.33 billion. Key reason that explains Indonesia's lower trade surplus is rising imports ahead of the Ramadan (the Islamic fasting month) and Idul Fitri celebrations (the festivities that follow after the end of Ramadan).
Based on the latest data from Indonesia's Statistics Agency (BPS), released on Monday morning (15/05), Indonesia's export and import performance in April 2017 slightly weakened compared to the performance in the preceding month but remains in much better shape than it was in April one year ago. The nation's April trade surplus is USD $1.24 billion, smaller than the revised USD $1.39 billion surplus in the preceding month but still exceeding analysts' forecasts.
Indonesia reported good trade data on Monday (17/04). Indonesia's Statistics Agency (BPS) announced the nation's exports were worth USD $14.59 billion in March 2017, up 23.55 percent from the same month one year earlier (and the biggest rise since August 2011), on the back of growing oil and gas shipments. Moreover, the pace of Indonesia's export growth in March was nearly two times faster compared to growth recorded in the preceding month as well as the forecast of most analysts.
Indonesia Statistics (BPS) announced on Wednesday (15/03) that Indonesia's exports and imports grew at a slower pace in February 2017 (compared to the preceding month). This performance was in line with expectations. While Indonesia's exports grew 11.16 percent year-on-year (y/y) to USD $12.57 billion in February 2017, its imports grew 10.61 percent (y/y) to USD $11.26 billion over the same period.
Due to rising commodity prices Indonesia saw its export performance surge in January 2017. According to the latest data from Indonesia's Statistics Agency (BPS), Indonesia's exports grew 27.71 percent year-on-year (y/y) to USD $13.38 billion from the same month one year earlier, the fastest pace of export value growth since September 2011 and also exceeding analysts' estimates. This export growth was particularly attributed to higher prices of coal and crude palm oil (CPO).
Indonesia's Statistics Agency (BPS) informed that both the nation's exports and imports rose for a third straight month (on a year-on-year basis) in December 2016. However, the growth pace slowed compared to the preceding month. Indonesia's exports climbed 15.6 percent (y/y) to USD $13.77 billion in the last month of 2016, slightly exceeding expectations and touching the highest export earnings of the past 24 months. Meanwhile, Indonesia's imports climbed 5.8 percent (y/y) to USD $12.78 billion in December 2016, also slightly surpassing expectations.
The Centre for Strategic and International Studies (CSIS) believes Indonesia's export performance can grow up to 3.2 percent year-on-year (y/y) in 2017 based on the most recent global growth projections. Yose Rizal, Head of the Economics Department within CSIS, said this 3.2 percent growth outlook is a modest one and Indonesia's export performance should actually perform better. In fact, for economic development of Indonesia, Rizal says export growth in the range of (at least) 4 - 5 percent (y/y) is required.
The slow recovery of global demand made Indonesia decide to revise down its export growth target for non-oil and gas products in 2017. Indonesian Trade Minister Enggartiasto Lukita said the government now targets a 5.6 percent year-on-year (y/y) growth in non-oil and gas exports (down from its earlier target of 11.9 percent y/y). This target is regarded as more realistic considering the slow recovery of international demand. To boost export growth in 2017 the government aims to diversify export markets as well as to, simply, export more products to existing export markets.
Indonesia's Statistics Agency (BPS) announced on Thursday (15/12) that the nation's export performance in November 2016 showed a sharp increase. Sasmito Hadi Wibowo, Deputy for Statistics Distribution and Services at BPS, said Indonesia's export growth was "rather spectacular" and gives rise to optimism that global demand and trade have improved. In November Indonesia posted a USD $838 million trade surplus, down from the revised USD $1.24 billion in the preceding month. In all of the first eleven months of 2016, Indonesia recorded a trade surplus.
Latest Columns Trade Balance
The trade balance of Indonesia improved in 2014. Over the whole year of 2014 Indonesia posted a USD $1.88 billion trade deficit, significantly better than the USD $4.08 billion deficit it recorded a year earlier. Today (02/02), Statistics Indonesia announced that Indonesia posted a USD $0.19 billion trade surplus in the last month of the year after having recorded a USD $0.42 billion trade deficit in the preceding month. The improved performance is mainly due to the country’s growing non-oil & gas surplus and narrowing oil & gas deficit.
Indonesia’s benchmark stock index (Jakarta Composite Index) fell 0.43 percent to 5,220.00 points on Monday (05/01) amid profit taking on a relatively quiet trading day on the Indonesia Stock Exchange. Meanwhile, the Indonesian rupiah exchange rate depreciated 0.55 percent to IDR 12,614 per US dollar according to the Bloomberg Dollar Index as concerns about Greece exiting the euro intensified and boosted US dollar demand. Moreover, market participants were still reacting to Indonesia’s latest trade and inflation data.
Indonesia’s inflation pace accelerated in December 2014, exceeding estimations of analysts and Indonesia’s central bank. December inflation, 2.46 percent (m/m) or 8.36 percent (y/y), accelerated due to the impact of higher subsidized fuel prices (introduced in November) and volatile food prices (fluctuating rice and chili prices at the year-end). Other factors that contributed to high inflation in 2014 were higher electricity tariffs for households and industries, the higher price of 12 kg LPG, and an airfare adjustment.
Indonesia’s inflation reached 2.46 percent month-to-month (m/m) in December 2014 due to the impact of higher subsidized fuel prices implemented on 18 November 2014. On a year-on-year (y/y) basis, Indonesia’s inflation was recorded at 8.36 percent, slightly lower than the result in 2013 (8.38 percent). Inflation has been high in 2013 and 2014 as the Indonesian government raised prices of subsidized fuels in both years in an attempt to relieve fiscal pressures brought about by costly oil imports.
After having recorded a trade deficit for several months, Indonesia finally posted a USD $20 million trade surplus in October 2014, according to data from the country’s Central Statistics Agency (BPS) released on Monday (01/12). Exports in October amounted to USD $15.35 billion, while imports were recorded at USD $15.33 billion. The improvement in Indonesia’s trade balance was mainly on the back of growth in the country’s non-oil & gas sector exports. This sector saw a surplus of USD $1.13 billion (up from USD $760 million in September).
The central bank of Indonesia (Bank Indonesia) released a press statement on Wednesday evening (01/10) in which it set out its view on the country’s trade balance and inflation after the latest economic data had been released by Statistics Indonesia (abbreviated BPS) earlier on the day. Based on information of BPS, Indonesia’s September inflation was relatively low at 0.27 percent month-to-month (m/m), while the August trade balance swung back into a deficit at USD $318.1 million.
The central bank of Indonesia (Bank Indonesia) kept its key interest rate (BI rate) at 7.50 percent for the tenth consecutive month as inflation is under control and well within the year-end target of the central bank (3.5-5.5 percent). The lending facility and deposit facility were kept at 7.50 percent and 5.75 percent, respectively, at Thursday’s Board of Governor’s Meeting (11/09). The central bank also expects that the current interest rate environment is capable of curbing the country’s wide current account deficit.
Contrary to the positive performance of the benchmark stock index of Indonesia on Monday’s trading day (01/09) and despite positive domestic economic data released by Statistics Indonesia, the Indonesian rupiah exchange rate depreciated 0.22 percent to IDR 11,716 per US dollar based on the Bloomberg Dollar Index on Monday (01/09). The main reason for the currency’s depreciation is the strengthening US dollar as US economic data are improving and inflation is slowing in the Eurozone.
Governor of the central bank of Indonesia (Bank Indonesia), Agus Martowardojo, commented on Indonesia’s troubled current account balance on Tuesday (12/08). Martowardojo said that he expects the balance to improve in 2014. Last year, the current account deficit of Southeast Asia’s largest economy reached 3.3 percent of gross domestic product (GDP); a level which is generally regarded as unsustainable. This year, the deficit may ease to 3 percent of GDP. For investors the current account balance is an important matter. Why?
According to Statistics Indonesia (BPS), the country’s trade balance in June 2014 recorded a deficit of USD $0.30 billion after the USD $0.05 billion surplus in the previous month. The performance of Indonesia’s trade balance was influenced by shrinkage of the country’s non-oil & gas surplus amid a lower oil & gas deficit compared to May 2014. Meanwhile, inflation was up 0.93 percent (month-to-month) in July 2014; a good performance amid the Ramadan and Idul Fitri festivities. Annual inflation eased to 4.53 percent (year-on-year).
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